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This will be fun ...


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Chewing Grass
11 minutes ago, spygirl said:

Brazil and Argentina to start preparations for a common currency

Other Latin American nations will be invited to join plan which could create world’s second-largest currency union


The booby?

The Andrex?

Latin Americ has common currrency - $


LATEX would be a good flexible name.

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It what world could that possibly be a good idea?  South America economies are some of the most unstable in the world, Argentina defaults on its sovereign debt as regular as clockwork.

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Lightly Toasted

International settlement first, I reckon. Maybe a bit like the ECU used to be -- national currencies floating within limits with the intention of converging the economies.

The trick is to stop short of introducing a common national currency before you've achieved permanent convergence -- political, social and fiscal, as well as economic. The EU knowingly botched that bit, but then the EU is obsessed with the solution "more EU" regardless of the problem; they are willing to sacrifice anything on the altar of The Project including the long-term stability of the project itself.

I see no reason (yet) to suppose that South America will be so blinkered.

From the FT link:

The initial focus will be on how a new currency, which Brazil suggests calling the “sur” (south), could boost regional trade and reduce reliance on the US dollar, officials told the Financial Times. It would at first run in parallel with the Brazilian real and Argentine peso.

“There will be . . . a decision to start studying the parameters needed for a common currency, which includes everything from fiscal issues to the size of the economy and the role of central banks,” Argentina’s economy minister Sergio Massa told the Financial Times.

“It would be a study of mechanisms for trade integration,” he added. “I don’t want to create any false expectations . . . it’s the first step on a long road which Latin America must travel.”

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